A wall sign with the logo of aluminium and power producer En+ Group is seen on the facade of a building in central Moscow, Russia February 13, 2018. REUTERS/Sergei Karpukhin

February 14, 2018

By Dasha Afanasieva and Olga Popova

LONDON/MOSCOW (Reuters) – Russia’s En+ Group <ENPLq.L> has invited international banks to pitch for the sale of $1 billion(721.60 million pounds) of shares in the company that manages the aluminum and hydropower businesses of Russian businessmen Oleg Deripaska, three sources said.

The inclusion of Deripaska on a U.S. list of Russian oligarchs published on Jan. 29, however, is making some U.S. banks who worked with En+ on its initial public offering (IPO) in November wary about participating this time, one of the sources said.

The source, whose institution has been asked to pitch for the new business, said while there was no suggestion advising on the share sale would attract U.S. fines, compliance departments were concerned about any risk of reputational damage.

The $1.5 billion IPO was the first major listing in London by a Russian company since 2014, when Russia’s annexation of the Crimea peninsula triggered Western sanctions against Moscow.

U.S. LISTS

Since the IPO, Deripaska and another 95 Russians worth more than $1 billion were named in a report the U.S. Treasury Department was required by Congress to compile as part of the Countering America’s Adversaries Through Sanctions Act (CAATSA).

“The inclusion of individuals or entities in this report, its appendices, or its classified annex does not, in and of itself, imply, give rise to, or create any restrictions, prohibitions, or limitations on dealings with such persons by either U.S. or foreign persons,” the U.S. Treasury said on its website.

However, several businessmen on the list said Russian companies may start having problems in their dealings with international banks because of the report.

Deripaska was ranked by Forbes magazine on Wednesday as Russia’s 20th richest man, with a net worth of $6.7 billion.

The industrial assets that form the core of his wealth were acquired during the chaotic sell-off of Russian state assets in the 1990s, following the collapse of the Soviet Union.

Along with En+, Deripaska also controls Russian light vehicle maker GAZ <GAZA.MM> and has agriculture, airport and other businesses.

One of the sources said the planned share sale by En+ was expected to happen after Russia’s presidential election in March, which incumbent Vladimir Putin is widely expected to win.

It was not immediately clear why En+ wanted to sell shares or whether the offering would be of new or existing shares.

Before the November listing of shares in London and Moscow, the company’s net debt was $13.1 billion. It reduced that by repaying a $943 million loan to VTB, Russia’s second-largest lender, following the listing.

In December, En+ said its third-quarter net profit rose 43 percent to $350 million helped by higher aluminum prices.